In fact, one section of the yield curve has already inverted: between 3-year and 5-year notes.

"Investors are coming around to our downbeat view of the prospects for the USA economy", analysts at Capital Economics wrote on Tuesday, arguing that there was no reason to regard this pending yield curve inversion as different from others.

The dollar, which started the week on a weak footing as a thaw in trade tensions between Washington and Beijing sapped demand for the safe-haven greenback, extended its fall as investors fretted about an inversion of the short end of the USA yield curve in bond markets. It has sometimes taken more than a year for a recession to occur after the yield curve inverts.

"Inversion of that curve is the real recession red flag", said Neil Wilson, the chief market analyst at Markets.com.

China and United States greenhouse gas levels to new highs
China's emissions accounted for 27% of the global total, having grown an estimated 4.7% in 2018 and reaching a new all-time high. India is the fourth highest emitter of carbon dioxide after China, U.S., and the European Union region.

The yield curve inverted between the 2- and 10-year yield before the recessions of 1981, 1991, 2000 and 2008.

"A lot of it is momentum", said John Canavan, market strategist with Stone & McCarthy Research Associates in NY.

A typical yield curve includes much higher interest rates for maturities further into the future. Late in the day, the two-year yield also dropped below the five-year's, with the gap at negative 0.5 basis point heading into the evening.

This has set off a debate among bond investors as to the meaning of the inversion, with one camp arguing it is mainly symbolic while others claiming it indicates a recession is near.

While Fed officials have begun pointing to "headwinds" from slowing global growth and other risks, it won't be clear how much this has changed their outlook until they issue fresh economic projections after the December 18-19 policy meeting.

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